Philippines and Germany: Revision of Double Taxation Agreement

25.07.2012 On 20th July Philippines and Germany finished the revision of Double Taxation Agreement in the last stage of negotiations. The parties have also agreed upon the procedure of internal ratification of the Agreement. It is intended to lighten the bilateral trade between countries and to stimulate the inflow of investments. The procedure of signing of the new DTA is planned in Germany in the beginning of the next year.
It should be noticed that both states supported the introduction of new standards which help to avoid risks of double taxation. Furthermore, the Agreement is directed to prevention of tax evasion, strengthened cooperation in compliance with the tax laws of both countries.

Expert’s opinion

The revision of DTA brightly shows tight interaction of countries that are interested in creation of favorable conditions for business operating in the “friendly” jurisdiction.
It’s also to be noticed that in this case the matter concerns important economic and investment partners. According to the statistics, in 2011 the trade turnover between Philippines and Germany reached USD 2,9 bn.
Naturally, Philippines have crucial advantages from such symbioses with Germany that is in fact the biggest market of trade for Philippines. However, there are some meaningful benefits both for the German party, as on Philippines lots of branches of the prosperous German companies are registered, like Siemens, Bosch, BMW and others, for which the tax preferences can become an incentive for further rooting of business in this jurisdiction.

On the basis: dfa.gov.ph

Julia Akhmetova ( Paralegal of Moscow office of Honest & Bright Ltd)